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EXHIBIT 10: (e),(f) and (g)
MATERIAL CONTRACTS
FIRST AMENDMENT
TO
LOAN AGREEMENT
THIS FIRST AMENDMENT TO LOAN AGREEMENT (this "Agreement") is
made as of the 11th day of May, 1995, by PHARMAKINETICS
LABORATORIES, INC., a corporation organized and existing under
the laws of the State of Maryland (the "Obligor"), and
NATIONSBANK, N.A., a national banking association (formerly known
as "Nationsbank of Virginia, N.A." and successor by merger to
NationsBank, N.A. which was formerly known as "NationsBank of
Maryland N.A." and successor by merger to Maryland National Bank
(the Bank")).
RECITALS
A. The Obligor and the Bank entered into a Loan Agreement
dated May 13, 1993 (the same, as amended, modified, substituted,
extended, and renewed from time to time, the "Loan Agreement").
The Loan Agreement provides for some of the agreements between
the Obligor and the Bank with respect to the "Loans" (as defined
in the Loan Agreement), including revolving credit facility in an
amount not to exceed $500,000 and term facilities in an original
principal amount of $2,400,000.
B. The Obligor has requested that the Bank amend the
interest rates under the Loans and amend certain other conditions
and covenants under the Loan Agreement.
C. The Bank is willing to agree to the Obligor's request on
the condition, among others, that this Agreement be executed.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises and for
other good and valuable consideration, receipt of which is hereby
acknowledged, the Obligor and the Bank agree as follows:
1. The Obligor and the Bank agree that the Recitals above
are a part of this Agreement. Unless otherwise expressly defined
in this Agreement, terms defined in the Loan Agreement shall have
the same meaning under this Agreement.
2. The Obligor and the Bank agree that on the date hereof
the aggregate outstanding principal balance under the Revolving
Credit Note (subject to change for returned items and other
adjustments made in the ordinary course of business) is $ 0 and
under the Term Note is $2,080,680.60.
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3. The Loan Agreement is hereby amended as follows:
(a) The section headed "Definitions" is hereby deleted
and the following is substituted in its place and therefor is the
following:
"Definitions. Except as specifically otherwise defined
herein, all forms shall have the meanings ascribed to them
by generally accepted accounting principles.
"Business Day" means any day other than a Saturday, Sunday
or other day on which commercial banks in Maryland are
authorized or required to close.
"Confirmed Amended Plan of Reorganization" shall mean the
Amended Plan of Reorganization confirmed on April 1, 1993 In
Re: PharmaKinetics Laboratories, Inc. (Case No. 90-5-5020-
JS (Chapter 11) in the United States Bankruptcy Court for
the District of Maryland)).
"Eligible Receivable" and "Eligible Receivables" mean, at
any time of determination thereof, the collective reference
each account of the Obligor which conforms and continues to
conform to the following criteria to the satisfaction of the
Bank: (a) the account arose in the ordinary course of the
Obligor's business from services performed by the Obligor,
and such services have been satisfactorily completed and
accepted by the appropriate account debtor; (b) the account
is based upon an enforceable order or contract, written or
oral, for services performed, and the same were shipped,
held, or performed in accordance with such order or
contract; (c) the title of the Obligor to the account is not
subject to any prior assignment, claim, Lien, or security
interest, except Liens created by the account debtors in
connection with their interests in the goods, and the
Obligor otherwise has the full and unqualified right and
power to assign and grant a security interest in it to the
Bank as security and collateral for the payment of the
Obligations; (d) the amount shown on the books of the
Obligor and on any invoice, certificate, schedule or
statement delivered to the Bank is owing to the Obligor and
no deposit or partial payment has been received unless
reflected with that delivery; (e) except for amounts
received by the Obligor in the ordinary course for services
to be performed, the account is not subject to any claim of
reduction, counterclaim, setoff, recoupment, or other
defense in law or equity, or any claim for credits,
allowances, or adjustments by the account debtor for
unsatisfactory services, or, except for amounts received by
the Obligor in the ordinary course for services to be
performed, for any other reason; (f) the account debtor has
not returned or refused to retain, or otherwise notified the
Obligor of any dispute concerning, or claimed nonconformity
of, any of their services from the sale of or progress
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xxxxxxxx with respect to, which the account arose; (g) the
account is not outstanding more than seventy-five (75) days
from the date of the invoice therefor, or is a royalty
receivable, not outstanding more than seventy-five (75) days
from the due date; (h) the account is not owing by any
Account Debtor for which the Lender has deemed fifty percent
(50%) or more of such Account Debtor's other accounts (or
any portion thereof) due to the Borrower to be non-Eligible
Receivables; (i) the account does not arise out of a
contract with, or order from, an account debtor that, by its
terms, forbids or makes void or unenforceable the assignment
by the Obligor to the Bank of the account arising with
respect thereto; (j) the account debtor is not an affiliate
of the Obligor; (k) the account debtor is not incorporated
in or primarily conducting business in any jurisdiction
located outside of the United States of America or Canada;
(l) the account debtor is not governmental authority,
agency or instrumentality, domestic or foreign; (m) except
for amounts received by the Obligor in the ordinary course
for services to be performed, the Obligor is not indebted in
any manner to the account debtor, except for customary
credits, adjustments and/or discounts given to an account
debtor by the Obligor in the ordinary course of its
business, except for amounts received by the Obligor in the
ordinary course for services to be performed, and (n) the
Bank in the exercise of its sole and absolute discretion has
not deemed the account ineligible because of uncertainty as
to the creditworthiness of the account debtor or because the
Bank otherwise considers the collateral value thereof to the
Bank to be impaired or its ability to realize such value to
be insecure. In the event of any dispute, under the
foregoing criteria, as to whether an account is, or has
ceased to be, an Eligible Receivable, the decision of the
Bank in the exercise of its sole and absolute discretion
shall control. "Borrowing Base" means the sum of eighty
percent (80%) of Eligible Receivables."
"Lien" means any mortgage, deed of trust, deed to secure
debt, grant, pledge, security interest, assignment,
encumbrance, judgement, lien, hypothecation, provision in
any instrument or other document for confession of
judgement, cognovit or other similar right or remedy, claim
or charge of any kind, whether perfected or unperfected,
avoidable or unavoidable, including, without limitation, any
conditional sale or other title retention agreement, any
lease in the nature thereof, and the filing of or agreement
to give any financing statement under the Uniform Commercial
Code of any jurisdiction, excluding the precautionary filing
of any financial statement by any lessor in a true lease
transaction, by any xxxxxx in a true bailment transaction or
by any consigner in a true consignment transaction under the
Uniform Commercial Code of any jurisdiction or the agreement
to give any financing statement by any lessee in a true
lease transaction, by any bailee in a true bailment
transaction or by any consignee in a true consignment
transaction.
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"Loan" or "Loans" means collectively any and all loans and
other financial accommodations (including, without
limitation, letters of credit) heretofore or hereafter made
by the Bank to the Obligor.
(b) The heading "Loan Procedures for Revolving Line of
Credit" is hereby deleted in its entirety.
(c) The section "Loans Upon Request to Obligor" is hereby
deleted in its entirety and substituted in its place therefor is
the following:
The Revolving Loan.
1. Subject to and upon the provisions of this
Agreement, the Bank establishes a revolving credit facility
in favor of the Obligor (the "Revolving Loan"). The
outstanding principal balance of the Revolving Loan shall at
no time exceed the lesser of (i) $500,000 or (ii) the
Borrowing Base. The Bank's obligation to make advances
under the Revolving Loan shall terminate on November 30,
1996 (the Revolving Credit Termination Date"), and following
a Default or an Event of Default under this Agreement, may
be limited, suspended or terminated at the Bank's sole and
absolute discretion exercised from time to time.
2. The Obligor's obligation to repay the advances of
the Revolving Loan shall be evidenced by a promissory note
dated the same date as this Agreement (as amended, modified,
restated, substituted, extended and renewed at any time and
from time to time, the "Revolving Credit Note") in
substantially the form attached to this Agreement as EXHIBIT
A-2 and in the aggregate principal amount of $500,000 having
a maturity date, repayment terms and interest rate as set
forth in the Revolving Credit Note. Subject to the terms
and conditions of this Agreement, sums borrowed under the
Revolving Loan and repaid may be readvanced.
3. The Obligor may borrow under the Revolving Loan on
any Business Day. Advances under the Revolving Loan shall
be deposited to the Obligor's demand deposit account with
the Bank or shall be otherwise applied as directed by the
Obligor, which direction the Bank may require to be in
writing. No later than 10:00 am (Baltimore time) on the
date of the requested borrowing, the Obligor shall give the
Bank oral or written notice and (if requested by the Bank)
the purpose of the requested borrowing. Any oral loan
notice shall be confirmed in writing by the Obligor within
three (3) Business Days after the making of the requested
Revolving Loan.
4. The proceeds of the Revolving Loan shall be used
solely to pay the Obligor's business expenses incurred in
the ordinary course of the Obligor's business.
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(d) On Page 7 of the Loan Agreement, the section "Financial
Statements" is hereby deleted in its entirety and substituted in
its place therefor is the following:
"Financial Statements". Maintain at all times a system of
accounting satisfactory to the Bank and will furnish to the
Bank at such time or times as specified by the Bank such
financial statements as may be required by the Bank,
including, but not limited to:
1. Annual audited 10-K Report of the Obligor within
one hundred twenty (120) days of the Obligor's fiscal year
end.
2. Annual projected financial statements of the
Obligor (including profit and loss, balance sheet, and cash
flow statements) prepared in-house, not less than thirty
(30) days prior to the Obligor's fiscal year end.
3. Monthly operating statements prepared in-house
within thirty (30) days of month end.
4. Quarterly 10-Q Statement, certified by the Chief
Financial Officer of the Obligor, within forty-five (45)
days of each quarter end.
5. Annual Tax Return of PKLB Limited Partnership
within one hundred twenty (120) days of its filing.
6. Quarterly A/R agings and Obligor's Certificates
within forty-five (45) days of each quarter end.
7. With each quarterly financial statement, a detailed
computation of each financial covenant in this Agreement
which is applicable for the period reported, all as prepared
and certified by a Responsible Officer of the Borrower and
accompanied by a certificate of that officer stating whether
any event has occurred which constitutes a Default or an
Event of Default hereunder, and, if so, stating the facts
with respect thereto.
(e) On Page 9, the section "Cash Flow Coverage" is
hereby deleted in its entirety and substituted in its place
therefor is the following:
"Cash Flow Ratio". Maintain on a rolling four quarter
basis, measured quarterly, a cash flow ratio of not less
than:
Quarter Ending Ratio
3/31/95 through 6/30/95 1.25 to 1.0
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6/30/95 and thereafter 1.10 to 1.0
Cash flow ratio is defined as earnings (including non-
operating income) before interest, taxes, depreciation, and
amortization, divided by all contracted principal and
interest payments, exclusive of operation leases, and,
commencing with fiscal year-ending 1995 and for each period
thereafter, all non-financed capital expenditures.
(f) On Page 10, the section "Net Worth" is hereby
deleted in its entirely and substituted in its place therefor is
the following:
"Net Worth. Maintain on a quarterly basis a net worth of
not less than $800,000.00. "Net worth" for this purpose
shall mean the Obligor's equity less intangible assets and
the value of the investment in TSI Escrowed Stock and TSI
Non-Escrowed Stock as defined in the Confirmed Amended Plan
of Reorganization."
(g) On Page 12, the Section "Lease Obligations" is
hereby deleted in its entirety and substituted in its place
therefore is the following:
"Lease Obligations. Enter into any new Leases of real or
personal property in one twelve (12) month period which
exceed in the aggregate an equivalent purchase price of
$500,000.00."
(h) On Page 12, the section "Capital Expenditures" is
hereby deleted in its entirety.
4. The Obligor hereby covenants and agrees as follows:
The following section is hereby added to the Obligor's
covenants and Agreements:
Deposits. The Obligor shall maintain with the Bank a
depository relationship of not less than $100,000 at all
times.
Minimum Payments. The Obligor agrees that in the event the
Obligor pays less than $100,000 to the Bank in any fiscal
year, the Obligor shall pay to the Bank, within 30 days
after the end of the fiscal year, the difference between
$100,000 and the amount paid in such fiscal year.
5. The agreements of the Bank under this Agreement are
subject to the following terms and conditions, time being of the
essence:
The Bank, at its own expense, shall have received an
evaluation in form and substance satisfactory to the Bank by an
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independent appraiser satisfactory to the Bank, which evaluation
shall show that the maximum principal amounts of the Loans shall
not exceed 80% of the value of the real estate securing the
Obligations.
6. Notwithstanding the provisions of the Section of the
Loan Agreement headed "MIDFA" Insurance," the Bank agrees to pay
the next premium on the MIDFA insurance and each premium
thereafter.
7. The Obligor hereby issues, ratifies and confirms the
representations, warranties and covenants contained in the Loan
Agreement, as amended hereby. The Obligor agrees that this
Agreement is not intended to and shall not cause a novation with
respect to any or all of the Obligations.
8. The Obligor acknowledges and warrants that the Bank has
acted in good faith and has conducted in a commercially
reasonable manner its relationships with the Obligor in
connection with this Agreement and generally in connection with
the Loan Agreement and the Obligations, the Obligor hereby
waiving and releasing any claims to the contrary.
9. The Obligor shall pay at the time this Agreement is
executed and delivered all fees, including the Bank's one-half of
one percent (1/2%) of outstanding balance facility fee,
commissions, costs, charges, taxes and other expenses incurred by
the Bank and its counsel in connection with this Agreement,
including, but not limited to, reasonable fees and expenses of
the Bank's counsel and all recording fees, taxes and charges.
10. This Agreement may be executed in any number of
duplicate originals or counterparts, each of such duplicate
originals or counterparts shall be deemed to be an original and
all taken together shall constitute but one and the same
instrument. The Obligor agrees that the Bank may rely on a
telecopy of any signature of any Obligor. The Bank agrees that
the Obligor may rely on a telecopy of this Agreement executed by
the Bank.
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IN WITNESS WHEREOF, the Obligor and the Bank have executed this
Agreement under seal as of the date and year first written above.
ATTEST: PHARMAKINETICS LABORATORIES, INC.
/s/Xxxxx X. Xxxxxx By:/s/ X. Xxxxxxxx Xxxxx(SEAL)
X. Xxxxxxxx Xxxxx
President and Chief
Executive Officer
WITNESS: NATIONSBANK, N.A.
/s/Xxxxx Xxxxxxxxxx By:/s/ Xxxxx. X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
AGREEMENT OF GUARANTOR
The undersigned is the "Guarantor" under a Guaranty of Payment
Agreement, dated May 13, 1993 (as amended, modified, substituted,
extended and renewed from time to time, the "Guaranty"), in favor
of the foregoing Bank. In order to induce the Bank to enter into
the foregoing Agreement, the undersigned (a) consents to the
transactions contemplated by, and agreements made by the Obligor
under, the foregoing Agreement, and (b) ratifies, confirms and
reissues the terms, conditions, promises, covenants, grants,
assignments, security agreements, agreements, representations,
warranties and provisions contained in the Guaranty. Without
limiting the foregoing, the undersigned acknowledges and agrees
that the Obligations (defined in the Loan Agreement) include,
without limitation, the amendments described in the foregoing
Agreement and that the Obligations are covered by the Guaranty.
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WITNESS signature and seal of the undersigned as of the date of
the Agreement.
PKLB LIMITED PARTNERSHIP
By: PharmaKinetics
Laboratories, Inc.,
General Partner
/s/ Xxxxx X. Xxxxxx By:/s/ X. Xxxxxxxx Xxxxx
X. Xxxxxxxx Xxxxx
President and Chief
Executive Officer
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FIRST COMMERCIAL PROMISSORY NOTE MODIFICATION AGREEMENT
THIS FIRST COMMERCIAL PROMISSORY NOTE MODIFICATION AGREEMENT
is made this 11th day of May, 1995, by and between PHARMAKINETICS
LABORATORIES, INC., a corporation organized under the laws of the
State of Maryland (the "Borrower") and NATIONSBANK, N.A.,
formerly known as NATIONSBANK OF MARYLAND, N.A., successor by
merger to MARYLAND NATIONAL BANK, a national banking association
(the "Lender").
WHEREAS, by that certain Commercial Promissory Note dated
May 13, 1993 (the "Note") the Borrower become indebted to the
Lender in an amount not to exceed $500,000 (the "Revolving Credit
Committed Amount") under a revolving line of credit made by the
Lender to the Borrower pursuant to that certain Loan Agreement
dated May 13, 1993 (as amended, modified, substituted, extended,
and renewed from time to time, the "Loan Agreement"); and
WHEREAS, the Lender and the Borrower have agreed to decrease
the per annum rate of interest as hereinafter more fully set
forth.
NOW, THEREFORE, THIS AGREEMENT WITNESSETH:
That in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Lender and the Borrower covenant and
agree as follows:
1. The Borrower acknowledges that the present principal
balance of the Note is due and owing, subject to the terms of the
repayment hereinafter set forth, without defense, recoupment,
counterclaim or offset.
2. The terms, provisions and covenants of the Note are in
all other respects hereby ratified and confirmed and remain in
full force and effect.
3. The Note is hereby amended at the section headed
"Interest Rate" by decreasing the rate of interest under that
section from the Bank's Prime Rate (as that term is defined in
the Note) plus two percent (2%) to the Bank's Prime Rate. The
Prime Rate does not necessarily represent the lowest rate of
interest charged by the Bank to borrowers.
4. It is expressly agreed that the indebtedness evidenced
by the Note has not been extinguished or discharged hereby. The
Borrower and the Lender agree that the execution of this
Agreement is not intended to and shall not cause or result in a
novation with regard to the Note.
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WITNESS the signatures and seal of the Borrower and the Lender
the day and year first above written.
WITNESS OR ATTEST: PHARMAKINETICS LABORATORIES, INC.
/s/ Xxxxx X. Xxxxxx By:/s/ X. Xxxxxxxx Xxxxx(SEAL)
X. Xxxxxxxx Xxxxx
President and
Chief Executive Officer
WITNESS: NATIONSBANK, N.A.
/s/ Xxxxx Xxxxxxxxxx By:/s/ Xxxxx X. Xxxxxxxxx(SEAL)
Xxxxx X. Xxxxxxxxx
Vice President
GUARANTOR ACKNOWLEDGEMENT AND AGREEMENT
The undersigned respectively guaranteed to the Lender all of the
Obligations (as defined in the Loan Agreement), including without
limitation, the per annum rate of interest (as defined in the
annexed First Commercial Promissory Note Modification Agreement)
and hereby covenants and agrees with the Lender that the
execution of the foregoing First Commercial Promissory Note
Modification Agreement of even date herewith and the transactions
described therein and contemplated thereby do not and shall not
in any manner affect its obligations and liabilities under its
guaranty dated May 13, 1993 (as amended, modified, restated,
substituted, extended and renewed at any time and from time to
time, the "Guaranty"), and that the Guaranty is hereby ratified
and confirmed and remains in full force and effect.
Dated effective as of this 11th day of May, 1995.
WITNESS: PKLB Limited Partnership
By: PharmaKinetics Laboratories, Inc.
General Partner
/s/ Xxxxx X. Xxxxxx /s/ X. Xxxxxxxx Xxxxx(SEAL)
X. Xxxxxxxx Xxxxx
President
Chief Executive Officer
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FIRST NOTE MODIFICATION AGREEMENT
THIS FIRST NOTE MODIFICATION AGREEMENT is made this 11th day
of May, 1995, by and between PHARMAKINETICS LABORATORIES, INC., a
corporation organized under the laws of the State of Maryland
(the "Borrower") and NATIONSBANK, N.A., formerly known as
NATIONSBANK OF MARYLAND , N.A., successor by merger to MARYLAND
NATIONAL BANK, a national banking association (the "Lender").
WHEREAS, by that certain Note dated May 13, 1993 (the
"Note") the Borrower became indebted to the Lender in an amount
not to exceed $2,400,000 (the "Term Loan Amount") under a line of
credit made by the Lender to the Borrower pursuant to that
certain Loan Agreement dated May 13, 1993 (as amended, modified,
substituted, extended, and renewed from time to time, the "Loan
Agreement"); and
WHEREAS, the Lender and the Borrower have agreed to amend
the per annum rate of interest as hereinafter more fully set
forth.
NOW, THEREFORE, THIS AGREEMENT WITNESSETH:
That in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Lender and the Borrower covenant and
agree as follows:
1. The Borrower acknowledges that the present principal
balance of the Note is $2,080,680.60 and is due and owing,
subject to the terms of repayment hereinafter set forth, without
defense, recoupment, counterclaim or offset.
2. The Note is hereby amended at the section headed
"Interest Rate" by decreasing the rate of interest under that
section from the Bank's Prime Rate (as that term is defined in
the Note) plus two percent (2%) to the Bank's Prime Rate plus
one-half (1/2%). The Prime Rate does not necessarily represent
the lowest rate of interest charged by the Bank to borrowers.
3. The terms, provisions and covenants of the Note are in
all other respects hereby ratified and confirmed and remain in
full force and effect.
4. It is expressly agreed that the indebtedness evidenced
by the Note has not been extinguished or discharged hereby. The
Borrower and the Lender agree that the execution of this
Agreement is not intended to and shall not cause or result in a
novation with regard to the Note.
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WITNESS the signatures and seals of the Borrower and the Lender
the day and year first above written.
WITNESS OR ATTEST: PHARMAKINETICS LABORATORIES, INC.
/s/ Xxxxx X. Xxxxxx By:/s/ X. Xxxxxxxx Xxxxx(SEAL)
X. Xxxxxxxx Xxxxx
President and
Chief Executive Officer
WITNESS: NATIONSBANK, N.A.
/s/ Xxxxx Xxxxxxxxxx By:/s/ Xxxxx X. Xxxxxxxxx(SEAL)
Xxxxx X. Xxxxxxxxx
Vice President
GUARANTOR ACKNOWLEDGEMENT AND AGREEMENT
The undersigned respectively guaranteed to the Lender all of the
Obligations (as defined in the Loan Agreement), including without
limitation, the per annum rate of interest (as defined in the
annexed First Note Modification Agreement) and hereby covenants
and agrees with the Lender that the execution of the foregoing
First Note Modification Agreement of even date herewith and the
transactions described therein and contemplated thereby do not
and shall not in any manner affect its obligations and
liabilities under its respective guaranty dated May 13, 1993 (the
"Guaranty"), and that the Guaranty is hereby ratified and
confirmed and remains in full force and effect.
Dated effective as of this 11th day of May, 1995.
WITNESS: PKLB LIMITED PARTNERSHIP
By: PharmaKinetics Laboratories, Inc.
General Partner
/s/ Xxxxx X. Xxxxxx By:/s/ X. Xxxxxxxx Xxxxx(SEAL)
X. Xxxxxxxx Xxxxx
President and
Chief Executive Officer
